Summary Judgment After Exclusion of Property Damages Expert Opinion
Often Daubert or similar motions are the key pre-trial motions in environmental toxic tort cases because exclusion of an expert, particularly the plaintiff’s causation or damages expert, provides the basis for a summary judgment in favor of the defendant. Player v. Motiva Enterprises, LLC. 240 Fed. Appx. 513 (3rd Cir. 2007), is such a case. Plaintiffs owned or formerly owned 27 parcels of residential real estate in Gloucester Township, New Jersey. They claimed that leaks at a nearby gas station contaminated groundwater under their properties. Twenty six of the properties depended upon wells for drinking water. Of those properties, the wells on eighteen properties showed no contamination. Wells on the remaining eight properties showed some VOC contamination but the amounts detected were within the permissible range for drinking water under New Jersey’s ground water Quality Standards.
Notwithstanding the groundwater quality analytical data, plaintiffs claimed that the values of their properties had diminished due to the leaks at defendant Motiva’s gas station. Plaintiffs retained an experienced appraiser licensed in New Jersey to establish their injuries. Motiva filed a Daubert motion seeking to exclude the appraiser and to obtain summary judgment on the plaintiffs’’ negligence claim. The district court granted both motions. For the Daubert motion, the court found that the appraiser was not qualified because he had no experience appraising contaminated properties and that his methodology was unreliable. Without the expert, plaintiffs could not carry their burden of proof for their negligence claim.
The trial court was affirmed by the Third Circuit. The appellate court did not address the issue of the appraiser’s qualifications, but focused solely on the methodology he had employed. The appraiser had used a “Detrimental Condition Model,” which he said illustrates how market value is affected by a detrimental event and by the subsequent stages of recovery. As he interpreted this model, property will experience a drastic drop in market value immediately after a detrimental event occurs and then will regain value during four stages of recovery. 240 Fed. Appx. at 519. For this case, the plaintiff’s appraiser decided that the site was at the beginning of the remediation process, and early stage in recovery, so the loss in value would be two to three times greater than a property near a site in the final state of recovery. 240 Appx. at 520. For the comparison site, namely the site in the final stages of recovery, he used a site in another township even though he had no evidence that it was similar. In fact, he knew it was not similar because the contamination at the comparison site, unlike this site, had caused children to develop cancer. The appellate court concluded that it was within the trial court’s discretion to exclude the appraiser’s testimony.
In addition to the Detrimental Condition Model, the appraiser sent a survey to thirteen lenders asking whether they would approve a loan to purchase plaintiffs’ properties. Only six responded, and of the four who were unwilling to loan, one appeared to have misunderstood the survey. Nonetheless, based on the survey, plaintiffs’ appraiser concluded that only buyers with private financing were potential buyers of the plaintiffs’ properties. Comparing the plaintiffs’ properties to the only two properties sold for cash in the area, he then concluded that plaintiffs’ properties, if sold for cash, would be discounted by 66 percent. The trial court found the survey and the methodology for this opinion unreliable. 240 Fed. Appx. at 517. The appellate court found no abuse of discretion.
The appellate court also rejected the plaintiffs’ argument that the trial court was required to hold a hearing on the admissibility of the appraiser’s opinion. Whether to decide the motion without a hearing was a matter left to the trial court’s discretion. 240 Fed. Appx. at 521.